USD/ZAR

A representation of the amount of South African rand (ZAR) an individual can purchase for one US dollar (USD), the USD/ZAR pairing is a useful tool for those interested in forex trading.

Strangely, one of the major influences on the performance of ZAR in forex markets is the relative performance of USD, as the North American nation's position as one of the last remaining global superpowers means its economic performance is seen as an indicator of future trends in the marketplace.

South Africa is the wealthiest country in Africa due to its rich mineral deposits, including diamonds, gold, platinum, aluminium, iron ore, vanadium, zirconium and many more. It is also the world's third-largest exporter of coal.

As a result of this wealth of natural resources, ZAR can be impacted greatly by developments in global commodities markets - as can USD - meaning individuals keen to predict future currency fluctuations may wish to keep an eye on the relative strengths of major commodities.

Other commodity factors which have a bearing on the value of ZAR in relation to USD include trade volumes with major developed nations, with its chief exports including those commodities listed above, while its main imports are petroleum, manufactured goods and chemicals for use in mining and agriculture.

Meanwhile, the strength of USD for forex traders can be largely attributed to its position as the most-traded currency in the world - making up 84.9 per cent of average daily transactions in 2010.

As one of the world's most prolific manufacturing powerhouses, US currency can fluctuate based on announcements regarding labour statistics and manufacturing output.

The country's economy is largely based on industry, finance and the provision of high-tech goods and as a result, the main drivers of growth in the US are highly diversified. This means investors must have an in-depth knowledge of the state of the overall economy in order to effectively predict future performance.

Seen as one of the most stable forex currencies, USD remains the world's primary reserve currency, with almost two-thirds of currency reserves across the globe held in USD.